NBN ban on Huawei stays: Brandis

Attorney-General George Brandis has overruled a push by other senior ministers to relax a ban on Chinese telecommunications group Huawei helping build the national broadband network.

The decision is a blow to the world’s biggest manufacturer of telco equipment and could strain ties between Australia and the Chinese government, which are negotiating a free-trade agreement Prime Minister Tony Abbott wants signed within a year.

Since the previous Labor government vetoed Huawei from the NBN in 2012 on security grounds, the company has mounted a vigorous and high-profile lobbying campaign against allegations that its equipment is a security risk to communication networks.

“The decision of the previous government not to permit Huawei to tender for the NBN was made on advice from the national security agencies," he said. “That decision was supported by the then opposition after we received our own briefings from those agencies.

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“Since the election the new government has had further briefings from the national security agencies. No decision has been made by the new government to change the existing policy."

Last week Huawei’s Australian chairman, John Lord, told Fairfax Media he was “waiting to find out, like you and everyone else" whether ­Huawei would be allowed to supply the NBN under the new Coalition ­government.

“We’ve put in a lot of time . . . on both sides of politics," he said. “We would hope the new government would have a lot more knowledge [on] Huawei than the past government two years ago."

The lobbying seemed to have worked. Mr Robb said last week he supported reviewing the ban and the company had a “big future in Australia". Two weeks ago Mr Turnbull said even if Huawei was assumed to be “an accessory to espionage" it was questionable its equipment could be used for spying.

May not be over yet

Some experts and Coalition MPs still believe there is merit in having Huawei compete to offer equipment for the “outer access layer" of the NBN, which refers to links between households’ modems and the immediate local area “nodes".

This is distinct from equipment deployed in the NBN’s more sensitive “points of access", which are larger information centres, and the NBN’s monitoring and control systems, which manage the overall network.

Members of cabinet have been concerned about public perceptions of a division in the Coalition’s support for the Huawei ban after reporting boosted expectations of it being reconsidered.

Cabinet ministers said they were anxious about the reaction of the US to a perceived softening in Australia’s stance on telecommunications security and China generally.

Neither Mr Robb nor Mr Turnbull are members of cabinet’s National Security Committee.

Asked whether Coalition division on Huawei risked raising questions in the US government, Joshua Frydenberg, a parliamentary secretary to the prime minister and adviser on intelligence matters to the Howard government, cautioned that Australia “should always be careful to protect our most important security relationship and do nothing that endangers the high level of intelligence co-operation that we currently enjoy with the US".

He described the US as Australia’s “security guarantor" and highlighted that under the Howard government “information exchange between US and Australian intelligence agencies was strengthened to unprecedented levels". This is a reference to a little-known intelligence sharing agreements struck between Australia, the US and the UK after the September 11, 2001 terrorist attacks.

In an interview on Saturday, Mr Frydenberg, said he’d “spoken to the Attorney-General George Brandis, who has told me that the government position [on Huawei] has not changed" after updates from intelligence agencies.

“We continue to be guided by the security agencies’ advice as to who should be allowed to tender for major telecommunications projects," said Mr Frydenberg, also a long-time advisor to former foreign minister, Alexander Downer, who sits on Huawei Australia’s board.

Protecting our closest relationship

By 2003 a new three-nations agreement furnished Australian intelligence and military agencies, for the first time, with access to the “top secret" and “noforn" (meaning “no foreign eyes") Joint Worldwide Intelligence Communications System used by the US Department of DefenseOK and Department of State. In correspondence with the Financial Review over the weekend, General Hayden confirmed the exceptionally close relationship between Australian and US spy agencies.

He said that when briefing intelligence officers inside the CIA and NSA he would ask, “Who do you think our closest intelligence relationship is?" Officers would respond, “the UK", to which General Hayden would answer, “No, try again". The audience would then suggest Canada. General Hayden’s retort was: “No, it is actually Australia."

Leaks of classified US intelligence by former NSA contractor Edward Snowden have shown that under a program called STORMBREW the NSA collects foreign intelligence with the help of a “key corporate partner with access to international cables, routers and switches". Experts speculate this is a US telco company.

Almost all nations, including Australia and the US, can legally compel firms to facilitate spying, including the collection of emails and telephone calls, between approved overseas targets.

The CIA’s open source centre alleges that Huawei’s chairwoman Sun Yafang served in China’s foreign espionage service. The company’s founder Ren Zhengfei was a deputy director in the People’s Liberation Army’s Information Engineering Academy, which is responsible for telecommunications research.

Mr Brandis recently appointed the former director-general of the Australian Security Intelligence Organisation and national security advisor to former prime minister John Howard, Paul O’Sullivan, as his chief of staff.